Albertsons Companies wants more than $8 billion in damages over the failed Kroger merger, and the dispute is now heading to trial. The Boise, Idaho-based grocer laid out its case in a pretrial brief in the Delaware Court of Chancery. The trial starts Oct. 19.
The filing argues that The Kroger Co. willfully broke its promise to do whatever it took to win approval for the $24.6 billion deal, which the two companies announced in 2022. Kroger denies the claims.
What Albertsons Wants From Kroger
According to the brief, Kroger’s conduct cost Albertsons stockholders between $5.43 billion and $6.88 billion in lost merger premium, including interest through June 30, 2026. The exact amount depends on when the court decides the first breach happened.
Albertsons also seeks a tax gross-up of $1.4 billion to $1.7 billion. The company explains that any award would go to Albertsons, not directly to stockholders, which would add a corporate-level tax.
In addition, Albertsons claims the $600 million termination fee from the merger agreement. It also wants at least $75 million in prejudgment interest, plus fees and costs. Altogether, the brief says Kroger “has caused Albertsons over $8 billion in harm.”
Inside the Kroger Merger Dispute
The merger agreement sits at the heart of the case. In it, Kroger agreed to “use best efforts to take … any and all actions” to clear antitrust hurdles. The only limit was that Kroger did not have to sell more than 650 stores.
Albertsons argues Kroger never met that standard. Instead, the brief claims, Kroger guarded its internal profit targets, including a post-merger internal rate of return of at least 8%.
The filing also points to Kroger’s “banner rules.” Albertsons says Kroger used them to declare nearly 60% of stores in overlapping markets “ineligible” for divestiture, keeping the stronger performers for itself. The brief notes that Federal Trade Commission guidance warns against selling off weaker stores in grocery deals.
Albertsons also highlights a $400 million executive incentive plan tied to post-merger integration. According to the brief, some executives could earn bonuses of up to six times their base salaries. Albertsons argues the plan discouraged larger divestitures.
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A Divestiture Package That Kept Growing
Meanwhile, Kroger enlarged its divestiture offer one step at a time. The brief traces the package from 238 stores to 413, then 510, 541 and finally 579 stores. C&S Wholesale Grocers was the chosen buyer.
Each time, Albertsons says, regulators found the package lacking. The FTC sued to block the deal, and Colorado and Washington filed their own suits. Eight other states and the District of Columbia also joined the FTC case.
Albertsons further claims that in September 2024 it offered to cut the merger price by more than $800 million to pay for a stronger package. The brief alleges that Kroger’s CEO did not present that proposal to Kroger’s board.
On Dec. 10, 2024, a federal judge in Oregon issued a preliminary injunction, and a Washington state judge issued a permanent one. Albertsons ended the deal that same day and sued Kroger, as Abasto reported.
Kroger Pushes Back
Kroger, for its part, rejects the accusations. In its own court filing, the Cincinnati-based retailer wrote that “the evidence at trial will not prove Albertsons’ claims that Kroger willfully breached the Merger Agreement,” Grocery Dive reported. Kroger added that even if it did, Albertsons “cannot prove that any conduct by Kroger caused its alleged damages.”
Kroger also argues the FTC would have opposed the deal anyway. It further contends that Albertsons failed to meet its own obligations, which Kroger says cancels the $600 million fee. A Kroger spokesperson told BoiseDev the company “worked steadfastly” for nearly three years to secure approval.
Albertsons responds that Kroger dropped its counterclaims on the eve of trial but still hasn’t paid the termination fee.
The Stakes for Future Grocery Mergers
For supermarket operators, the Kroger merger fight matters beyond these two companies. The case tests how far “best efforts” promises reach when regulators closely examine large retail deals.
Albertsons now runs 2,240 stores and 1,709 pharmacies under 22 banners in 35 states and the District of Columbia, according to its Oct. 13 earnings release. Susan Morris leads the company as CEO.
Ultimately, a Delaware judge will decide whether Kroger owes billions or whether the deal collapsed under regulatory pressure.